However, although business leaders in manyFortune 500 companies are enthusiastically embracing BPO, clear disconnects are becoming apparent between this board-level Nirvana and organizations' practical ability to deploy BPO when we dive into the weeds of business and operational process redesign. One of the largest impediments in many organizations looking to BPO is the ability to configure IT systems to deal effectively with the management of outsourced and multisourced business processes.

Technology is struggling to adapt to today's changing business environment. Hang on--haven't we heard that statement somewhere before? Of course, but at last we are seeing progress in the IT community's understanding of business process transformation and the way it manages it. The movement toward BPO has been evident over the last five years, but it has started to reach a state of flux, with today's providers realizing that this is a pretty complex business and that you can't simply deploy outsourcing solutions in the vain hope that the associated technology morass will miraculously untangle itself.

Moreover, every organization's business processes are unique unto themselves, much to the chagrin of ambitious outsourcers trying to quickly leverage common processes across multiple clients. Whereas some organizations can easily adapt to an outsourcing model and rapidly transition many of their existing business processes to third-party management, other organizations need to adopt alternative sourcing solutions if outsourcing is not cost-effective or beneficial to the business. The one major constant is the need forflexibility.

Let's take as an example how the increased outsourcing of HR processes is influencing companies' ability to manage crucial HR data. HR data is the fulcrum of any business; the ability to have real-time integrated information about staff profiles and performance, compensation, and location is paramount to giving management the information it requires to make decisions about the organization. Hence, there is a vital need for an integrated data consolidation system to enable staff members to be managed, monitored, compensated, organized, and trained more effectively. Moreover, for international corporations, the benefits of managing an integrated global HR operation are increasing exponentially.

The problem many companies are facing is that decisions are made--usually at the CEO/CFO level--to outsource HR processes to reduce costs and, ultimately, to improve HR service delivery and strategy, without adequate investigation of how the organization can redesign its business processes to accommodate the introduction of a third-party provider . Many of today's HR systems were built around business models developed in the early 1990s, with integration of systems and business processes being a mere afterthought. In addition, today's business are dealing with a much more fluid, less hierarchical organization of information workers and complex process networks of managing partners, suppliers, and customers. And if these complications were not enough, there is also the necessity to build in controls, such as Sarbanes-Oxley and the SAS 70 auditing standard, which are shedding light on companies' business process management shortcomings.

Given all this, how can IT change to accommodate multisourcing organizations? Most IT systems are focused primarily on administrative tasks that are optimized for the four walls of the enterprise. Many organizations still persist in tying themselves to tightly integrated, monolithic business processes, where the potential need for subsequent integration is a mere afterthought. The movement toward more-flexible sourcing options and the Sarbanes-Oxley experience are highlighting many of these shortcomings.

The answer lies in mapping an organization's business processes to understand thesourcing break points where data leaves the organization, thus enabling the outsourcer and its customer to develop flexible systems that can reuse componentized business services in an outsourcing data model. The majority of today's IT systems were simply not built for the modern business era, and the movement toward engaging third parties to provide managed services for core business processes is highlighting this deficiency more than ever.

Moreover, outsourcing is providing real business case examples of why--and how--IT infrastructures need to change to accommodate today's changing business models and organizational structures.

Once an organization understands these sourcing break points, the key is to break them down into manageable XML-based components, hence the term "service-oriented sourcing." For example, it is possible to break down the recruiting process into hundreds of individual Web services. However, the organization needs to determine which processes are key to achieving the optimum recruiting strategy and avoid unnecessary overcomplexity in the process as it breaks down these integration boundaries, hence it needs to decide which key business processes to break down into manageable Web services.

These can be core services such as "employee screening," "compensation calculation," or "mapping candidate to other vacancies." It is these key protocols of the service-oriented architecture (SOA), in particular the BPEL (Business Process Execution Language) workflow engine, that can orchestrate these business processes across applications, company boundaries, and third-party outsourcers. With partners, suppliers, and outsourcers all adopting SOA across entire value chains, the business benefits of adopting SOA protocols to break down the lock-in of antiquated IT architectures are dramatically multiplied.

The reason SOA has until now failed to provide the ignition the IT industry has been waiting for is that there has been no genuine business inflection point to highlight the dire need for today's organizations to develop a business-service-based IT infrastructure. CEOs stopped plowing hundreds of millions of dollars into their CIOs' coffers a few years back, with the frustration of failing to realize the promised returns of hefty IT investment. With BPO they are seeing the benefits of transitioning noncore business processes into the hands of a third-party provider, and they are quickly discovering that IT is the key enabler in making a BPO model achieve the possible business benefits and cost savings. The bottom line: BPO is providing the business cases the IT industry has been hungering for in recent years.

Phil Fersht is the global research vice president of NelsonHall Ltd., an analyst firm focusing on business process outsourcing.

Feedback question: Is SOA radically changing how you think about outsourcing?